In a small business, you would likely have a financial power of attorney to take care of your business needs. If you find yourself incapacitated, you should have a power of attorney giving someone else the ability to conduct your financial affairs. It sounds scary but if drafted well, it won't give anyone too much authority until the right moment, which is why you need to give power of attorney to someone you trust with your business.

But a living will is a bit different. It talks about your more personal wishes, such as life support and hospital stays. As such, you need to be able to give this power of attorney to someone you trust with your life. This might not be the same person you trust with your business.

For business owners, a living will can lay out how your incapacity is determined. And the financial power of attorney can refer to the living will to see how incapacity is determined. The living will can propose which doctor deems you incapacitated, or it can create a panel that decides when you are incapacitated.

This is important for a business owner, especially if your business is a sole proprietorship, because your business is intrinsically tied to you and your well being. And often, your personal finances are tied to your business as well.